Financially struggling Digital Domain Media Group, owner of one of the entertainment industry's leading visual effects companies, said Tuesday it had filed a voluntary bankruptcy petition.

Digital Domain said it was seeking protection from creditors under Chapter 11 of the federal bankruptcy code as part of an effort to "ensure the long-term future of its core business" and trigger a "sale of assets."

The company announced that it entered an agreement with Searchlight Capital Partners to sell Venice-base Digital Domain Productions, a subsidiary that operates core visual effects business for the film, television and advertising industries, for $15 million.

The sale is subject to approval by the court. Digital Domain's senior debt holders also have agreed to provide Digital Domain up to $20 million in financing to pay operating expenses, including wages.

"We are excited to begin this new chapter in our history and look forward to partnering with Searchlight,'' said Ed Ulbrich, the newly appointed chief executive of Digital Domain Productions. "The capital commitment of Searchlight will enable us to continue to bring our expertise to feature films, advertising, games, and other media experiences, with a focus on what we do best -- creating amazing digital productions."

As of June 30, Digital Domain said it had assets of $205 million and liabilities of $214 million.

Tuesday's bankruptcy filing follows Digital Domain's announcement last week that the company was closing its animation studio in Port St. Lucie, Fla., and laying off most of its 320 employees. Chief Executive John Textor also abruptly resigned.